The Goods and Services Tax (GST) will have few tax rate slabs beside a standard rate but only for a transition period before India gradually moves to a pure single tax rate regime, Union Minister of State for Finance Arjun Ram Meghwal said. Slabs are necessary to protect manufacturing sector in the very low tax brackets, Meghwal said.
“There will be slabs in the tax rate beside a standard rate. Some sectors like Bikaneri Papad where tax is just one per cent… these industries will die if a single standard rate is applied,” the minister said here highlighting benefits of GST at an event here.
“At the time when we are pushing for ‘Make In India’, we cannot afford to impact any manufacturing sector. Manufacturers should ‘not’ fear that indirect taxes will go up in a major way,” he asserted.
“There will be a standard rate and slabs. We will not allow rates to increase from present rate. I can assure it will be not more than present tax,” he said.
Adding further, he pointed there will also be exemptions.
According to reports, government was working on four slabs.
However, Meghwal emphasised that the slabs will be for only transition period till country matures to move to a single tax rate what GST aims to attain.
Meghwal, however, did not elaborate what could be the transition period.
The minister said government will review after a year for bringing liquor and petro products under GST net to achieve real potential of the tax reform.
Product-based and location-based exemptions will be examined by the GST council, Meghwal said.
GST will help us to get on double digit GDP growth.
He hoped West Bengal will pass GST bill and asked the chambers to exert pressure towards that.
Meghwal also asked business houses to give their feedback and inputs on Companies Act amendments to the standing committee.